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The Battle for Australia’s Wealth

Australia, sometimes dubbed “the Lucky Country,” is now the scene of a mounting and increasingly acrimonious struggle over a proposed new tax of 40% on the profits of the major international mining companies.

Australia had for some time seemed to be living inside a charmed circle, as the waves of the global financial crisis  battered less fortunate lands.

This was primarily due to two factors. It has been the main supplier of mineral resources needed for the  Chinese economic “miracle”–that miracle has been made from Australian iron ore and  fired by Australian coal and gas, of which “The Lucky Country” has vast reserves. These reserves are serviced by  a transport and maritime infrastructure  largely made by Australian governments, but which make extraction easy and relative inexpensive to operate, and  by Australia’s proximity to those nations involved in the Asian economic  boom.

Add to that the generous subsidies  given  by  the government to the miners….and you have a paradise for the multinational companies.

As the Global Financial Crisis has unfolded the Chinese demand for Australian resources has continued, making Australia the sole OECD nation to have escaped the global recession, and the only place on the planet where unemployment has actually declined.

Add to this the fact that the Rudd Labor Government has followed a stimulus program which the OECD has actually praised and by an outpouring of money to many projects has been able to ensure  a quite remarkable degree of prosperity–so much so that many Australians seem blithely unaware of just how bad things are elsewhere. But then there is a word for people who live on  an island: “insular!”

But a month ago this tranquility was rudely shattered when PM Rudd announced a 40% Tax on the profits of mining companies operating in Australia to help fund new initiatives in health and education

Rudd, anything but a radical, has led a fairly timid Labor Government since 2007,  but has   now  aroused the right-wing parties to a frenzy, assisted and abetted by the mining companies, who  talk as if they are merely charitable organizations, working to help orphans and widows and who are being set-upon by a ruthless leftist regime. Shades  of Venezuela!!

Newspaper advertisements and a new TV-Radio campaign by the miners seek to depict Rudd and his Government as bandits and wreckers.

The wealthiest man in Australia, a mining magnet named Andrew Forrest, talks of sacking thousands of mine workers, and has produced a document saying that his Chinese customers are deeply worried by the planned tax. At the same time a Conservative Canadian minister has been persuaded to  offer the the miners a better deal in Canada

There is talk of a strike of capital (shades of Allende’s Chile) and  of general economic ruin and  now  the Conservative National Party Leader  Barnaby Joyce, long known for his hysterical hyperbole, has compared  PM Rudd to Hugo Chavez, complete with pictures from Caracas to drive home the point.

Chavez and the mild-mannered ex-diplomat Rudd would  make a very odd couple!
One waits for the Joyce to introduce Castro/Qadaffi and perhaps Lenin into the debate!

Indeed there is a curious parallel here with events elsewhere,

Australia, is one of the world wealthiest countries–10th on a recent OECD listing–but has in common with many countries in the Third World the fact that it’s prosperity is founded  in part on great resource wealth. So it is has more in common with counties like Bolivia and Venezuela and nations in the Middle East in regards  to the importance of getting its fair share of the  wealth derived from those  extractive industries.

The conservative parties, led in recent months  by a hard-line right-winger and former Howard Government official, Tony Abbott, have risen  in outrage to defend the largely foreign-owned mining companies, and Rudd and his ministers have responded in  what is now a bitter and increasingly class-based debate with much being said about the need to see that these Australian resources  are used to benefit  the  Australian people…Hugo Chavez would love it!

Suddenly Rudd is seen  in a new light and his supporters are rallying notably in the trade  union movement.

With elections due later this year the battle is one for the survival of the Rudd government

In this battle the Murdoch press has a played a major role for the Mining Lobby. Murdoch owns  dailies in most Australian cities and the national newspaper”The Australian” always a harsh critic of Rudd has been even more shrill and  extreme than usual..

Murdoch seems  determined to bring Rudd down and no statement seems too extreme or outlandish, including  a campaign to say that Rudd might be challenged from inside the Labor Party by his Deputy Julia Gillard, a claim without a shred of evidence,

Gillard had ridiculed this suggestion, and coming from one who has been identified with the Labor Left, her indignation seems  more than justified, as her loyalty to Rudd is unquestioned.

Suddenly a shrill and bitter note disturbs the air of a  nation where enjoyment of it’s economic good fortune has been taken for granted

When the national parliament resumes, the debate will take on a new urgency, for no one doubts now that Rudd’s critics a determined to destroy his Government.

BRIAN McKINLAY is the author of a number of books on Australian History, notably on the Labor Movement, and writes and comments on Politics  in the Australian media, including  commentaries on Radio 3CR Melbourne

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